UK Digital Infrastructure Investment Reaches £11.2bn in 2025
UK digital infrastructure investment reached £11.2bn last year, according to the Office for National Statistics (ONS), a significant jump from the previous official measure. However, this increase is primarily due to a redefinition of what constitutes digital infrastructure, rather than increased spending. On a year-over-year basis, investment actually fell by 4%.
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The ONS Redefinition
The ONS changed its measurement criteria, expanding the definition of digital infrastructure to include:
- Data centre buildings
- Hardware (including servers)
- Network software
- Radio spectrum permits
This resulted in a significant upward revision from the previous measure of £3.6bn to £11.2bn.
Key Findings
- Investment Decline: Despite the higher figure, investment fell £0.5bn from 2024.
- Top Asset Classes: 84% of the investment went towards "other buildings and structures" (£5.6bn) and "software and databases" (£3.8bn).
- Hardware Growth: After a long decline, hardware investment rose by 54.6% to £0.7bn, attributed to the expansion of data centres to support cloud computing and AI.
The Shift in Measurement
The old method overlooked crucial components of digital infrastructure, such as data centres, servers, and software. The new definition aligns better with the evolving digital landscape, especially with the rise of AI and cloud computing.
Driving Factors
- AI Adoption: AI use among UK businesses with ten or more employees increased from 12% in late 2023 to 35% this year.
- Cloud Usage: Around 69% of firms already used cloud systems in 2023, the foundation for AI deployment.
- Data Centre Growth: Oxford Economics reported a 400% increase in UK data centres between 2000 and 2024.
Future Pipeline
Barbour ABI identifies 171 data centre construction projects that have either started or are scheduled to begin in the past year, signaling continued investment in this critical infrastructure.